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Consumer Reports' Tod Marks Dishes on the Naughty & Nice List

Have you noticed any retailer's red tape situated next to the season's wrapping paper and holiday gifts? It seems that this time of year, some companies' policies and practices are especially aggravating. But when it comes to spotlighting those "hidden" pesky fees, analyzing the fine print, and noting unfriendly practices, consumers have a great friend in Tod Marks.

As the senior projects editor at Consumer Reports, Marks compiles the magazine's Naughty & Nice List, now in its third year. With input from everyday consumers and Consumer Reports staff, Marks singles out 10 "naughty" and 10 "nice" examples of corporate policy in action, listed in alphabetical order by company. We talked to Marks to learn what goes into making the list, and how consumers can use it to avoid pitfalls and make more educated decisions as 2012 comes to a close.

How does the Naughty & Nice List fit into Consumer Reports' overall holiday effort?
Tod Marks: We've done a lot of things to bring attention to shopping and spending this holiday season because those things are at the forefront, and we want people to know that they have choices. We have a holiday education program on extended warranties — why they don't make sense — and on gift cards and their more onerous aspects, such as expiration dates. We also do a series of holiday surveys starting in October and through the holidays about people and their speeding behavior. We were shocked with how many people are carrying debt from one holiday season to the next, for example.

How does the list work exactly?
TM: It's not a rating of companies based on overall performance. I want to stress that. We're not giving enterprises an overall thumbs up or thumbs down, but we are looking at specific aspects of a policy and whether they are favorable or not. It could be fine print, hidden fees, tricky fees, or certain aspects of customer service.

How do you decide who makes the respective lists?
TM: First, it's me. Then it's up to my colleagues in tech and editorial to come up with nominees, and we do a rigorous fact check on each one. Then we solicited input through our Consumer Reports Facebook friends, and from readers at ConsumerReports.org. We always try to engage our readers and went an extra step this year to elicit input.

We see that BMW is on the naughty list. What's that all about?
TM: That's something our auto people pointed out, and if not for them, it might have gone in one ear and out the other. Our experts said most BMWs come with "run-flat" tires, which can work with simple punctures. But if you get a blowout or a ripped sidewall, you'll have to call a tow truck. Chevrolet and Hyundai have been doing this, but we singled out BMW because most of their lineup comes with run-flat tires now, and without a spare tire or jack. They're moving in that direction on a large scale.

Ticketmaster made the naughty list, too. What are they up to this year?
TM: Ticketmaster is a company that is generally reviled, but they made the nice list last year for a policy that allowed people to exchange seats without penalty if better tickets were available before a performance. This year, they made the naughty list because of a policy to charge customers $2.50 to print out their own orders. They told us they were working hard to eliminate these sorts of fees, and had done so at 80% of their venues. So we said, "When you eliminate them at 100% of the venues, we'll put you on the nice list." They've been criticized for fees in the past, so fees and Ticketmaster seem to go hand in hand.

Was it tough to pare down from the initial pre-publication list?
TM: We had more than 100 nominees in all. This is not statistically rigorous — it's just anecdotes — but there have been instances where people were particularly critical of a company. Time Warner Cable, for example, had recently announced that they were going to charge people $3.95 a month to lease a modem. A lot of other cable companies do this, such as Cox, Comcast, and Bright House. But because it was timely, it elicited a lot of nominations for the naughty list.

Enough naughtiness. Give us an example of something nice this year.
TM: We spotlighted Home Depot for their policy regarding appliances. When you buy a new appliance, Home Depot will haul your old refrigerator or dishwasher off your property without charge. The delivery crew will also uncrate, set up, level, and test the new product.

Do you find that these lists ever cause companies to change the way they do things?
TM: Rarely do you see a cause and effect where if we say something, the companies respond, 'Hey, those guys at Consumer Reports just pointed this out, we've got to change this.' Usually it has to be a safety issue or a grassroots movement for change. Things have to start from the ground up to get policies changed.

We know how people use the Consumer Reports shopping lists. How should they ultimately use the Naughty & Nice List?
TM: The lists are designed to convey that people have choices, and highlight that not every company has the same policies. You have to weigh the pros and cons of what matters most to you as a consumer. We're just talking about things to think about. Certain fees or return policies may not matter to somebody else, but may matter to you.

Looking closer at the Naughty & Nice List, we noticed that it truly seems fair and useful. It's surprising how even the most admired companies can do goofy things that defy logic, while companies that endure their share of criticism can nail key aspects of customer service. As you forge ahead with your last-minute gift getting, remember that it's rarely a black-and-white world in the marketplace. Kudos to the Naughty & Nice List, and Tod Marks, for shedding some welcome light on the subject.

Lou Carlozo is a dealnews contributing writer. He covers personal finance for Reuters Wealth. Prior to that he was the managing editor of WalletPop.com, and a veteran columnist at the Chicago Tribune.

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